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  • Tim Knight from...
    04/28/2016 - 00:27
    I was expecting a few boring candidate statements of the U.S. Senate - AKA the World's Most Exclusive Club - but, boy, was I wrong. Just take a look at some of these gems.

The Bank of England Blasts The Threat To Capital Markets That Is High Frequency Trading

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Fri, 07/08/2011 - 12:22 | 1437077 SparkySC
SparkySC's picture

How about another Flash Crash today?

Teach them all a valuable lesson. It has to happen again, so they get rid of these Algo programs forever.

Fri, 07/08/2011 - 12:43 | 1437091 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Algo Machines from Hell are the only performing assets on the Street, and you want to get rid of them?  Without the Algo Machines from Hell and without their Flash Crashes, GDP would be negative, and you want to get rid of them?

Fri, 07/08/2011 - 20:09 | 1438749 Ahmeexnal
Ahmeexnal's picture

The concept humans have of time is flawed.

Fri, 07/08/2011 - 12:32 | 1437111 SMG
SMG's picture

That Bix Weir guy of the Road to Roota theory, has said the "good guys" were going to crash the market and blame it on HFT's.

He hasn't been 100% though.   I don't even know if there are any "good guys" left.   God, I hope so.

Fri, 07/08/2011 - 12:23 | 1437083 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

The Bank of England should have no say in any matter what so ever, because they started this whole fiat ponzi.  The BoE should be burned to the ground along with its proxie bank, the Federal Reserve.

Fri, 07/08/2011 - 13:07 | 1437268 TruthInSunshine
TruthInSunshine's picture

Under a gold standard, the amount of credit that an economy can support is determined by the economy's tangible assets, since every credit instrument is ultimately a claim on some tangible asset. But government bonds are not backed by tangible wealth, only by the government's promise to pay out of future tax revenues, and cannot easily be absorbed by the financial markets. A large volume of new government bonds can be sold to the public only at progressively higher interest rates. Thus, government deficit spending under a gold standard is severely limited. The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit. They have created paper reserves in the form of government bonds which — through a complex series of steps — the banks accept in place of tangible assets and treat as if they were an actual deposit, i.e., as the equivalent of what was formerly a deposit of gold. The holder of a government bond or of a bank deposit created by paper reserves believes that he has a valid claim on a real asset. But the fact is that there are now more claims outstanding than real assets. The law of supply and demand is not to be conned. As the supply of money (of claims) increases relative to the supply of tangible assets in the economy, prices must eventually rise. Thus the earnings saved by the productive members of the society lose value in terms of goods. When the economy's books are finally balanced, one finds that this loss in value represents the goods purchased by the government for welfare or other purposes with the money proceeds of the government bonds financed by bank credit expansion.

In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.

This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard.

 

-- Alan Greenspan

 

Alan Greenspan, Gold and Economic Freedom (1966)
Fri, 07/08/2011 - 13:25 | 1437347 Pseudo Anonym
Pseudo Anonym's picture

The Bank of England should have no say in any matter what so ever, because they started this whole fiat ponzi.

who's "they"?  The BOE is an inanimate institution.  It's the hofjuden running that joint that must be smoked out and burnt in a gas chamber.

Fri, 07/08/2011 - 13:38 | 1437390 Zero Govt
Zero Govt's picture

i 2nd the vote to burn the BoE to the ground... if the fire takes hold of Westminster too it's 'Bonus Time'

Fri, 07/08/2011 - 14:22 | 1437520 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

The BoE is a corporate institution that has wrecked the wealth of the State, and because society had established the State, the wealth of the people has been stolen from it.  This whole depression has been orchestrated by the corporations (BoE/Fed) so to inherit the economic landscape.  The BoE is directly responsible.

They did so by issuing currencie, but then taking the currencie off of the standard of real monie (gold/silver) and instituting the fiat ponzi.  Then they used the fiat ponzi to tax people unconstitutionally and used the stolen proceeds to give to other corporations (JPM, CAT, GM, etc) after they crashed markets by keeping interest rates low and ushering in the Housing Crash.

Now, once again, they offer solutions to the problems; the problems that they created.

Fri, 07/08/2011 - 12:24 | 1437085 Bartanist
Bartanist's picture

Where would volume be without HFT?

They would have to elimate the ETFs and other bucket shop bets to concentrate liquidity back in real equities. How many "so called" bankers would lose their jobs over that move? (answer: probably not enough)

Fri, 07/08/2011 - 12:25 | 1437086 SilverIsKing
SilverIsKing's picture

Dodd-Frank didn't address this?  Gee, wonder why...

Fri, 07/08/2011 - 12:26 | 1437090 Hondo
Hondo's picture

They need to ban it in the UK and true trading for "investment" will migrate to the UK and leave the US market to the casino players for a slow or not so slow death.

Fri, 07/08/2011 - 12:32 | 1437096 doomandbloom
doomandbloom's picture

People have forgotten to produce...there is no remedy for that

The services industry relied on middlemen ( banks etc) , who intially helped to provide information, enable people to get capital etc..but who were corrupt and grew too big. They did however give a lot of jobs..meaningless jobs...which kept people happy.

Internet is changing the game, the middlemen no longer have the power..but people have forgotten to produce, to create...

Many people think making money is the end goal...well..it was...in the era of the middlemen and information assymetry

So these traders who think they know how to trade...have lost their edge...its the computer engineers that are making the money....this is the end of trading as we know it..

Fri, 07/08/2011 - 12:28 | 1437100 Jovil
Jovil's picture

The bankers almost always win in the end and f**k the people. When they get into trouble the people bail them out. Is is rigged that way.

Just look at how the system is setup. One picture is worth a thousand words.

http://lonerangersilver.wordpress.com/?s=pyramid+of+the+capitalist+system

 

Fri, 07/08/2011 - 12:34 | 1437124 sbenard
sbenard's picture

That pic looks more like a kleptocracy than capitalism to me. That's how they should have labeled it IMHO.

Fri, 07/08/2011 - 12:39 | 1437145 alien-IQ
alien-IQ's picture

i've become quite fond of the term "Strumpetocracy"...I think it's more fitting and encompassing:-)

Fri, 07/08/2011 - 12:33 | 1437113 sbenard
sbenard's picture

Ooh, I wonder if George "Spooky Dude" Soros will tremble in his slippers. He has broken the Bank of England before, so I doubt it!

Fri, 07/08/2011 - 12:33 | 1437120 Smiddywesson
Smiddywesson's picture

Every market blowout need a villain, and the real villains are not going to take the fall.

HFTs have been doing this for a long time, and the Bank of England knew it, but now, when the jig is up, they come out railing against HFT trading.

Bingo!  Gentlemen, we have a scapegoat.  The recovery was shortsheeted by the evil speculators known as HFT quants.  That explains everything. 

Expect a few of the smaller thieves to be hung by the bigger thieves before all is said and done.

Fri, 07/08/2011 - 12:34 | 1437123 Cdad
Cdad's picture

Just as regulators should be looking into the threat of HFTs, so should they be evaluating the flawed mechanism known as the ETF.  The difficulty, in both cases, is finding regulators that are not corrupt or bought, as well as finding regulators smart enough to understand the two issues.

I defy any regulator within the sound of my comments to follow the math associated with creation units.  It is my opinion that the the systemic risks of ETF construction is every bit as threatening as the HFT.

But again, if the flood of pink slips in the financial services sector could just get going, we would be well on our way to addressing the primary problem of this parasitic, unproductive class.

Fri, 07/08/2011 - 15:04 | 1437750 Hacksaw
Hacksaw's picture

I agree totally. ETFs are derivatives of mass destruction with as much destructive power as CDSs. Every ETF should have a warning label, woe to all who enter here.

Fri, 07/08/2011 - 12:35 | 1437126 alien-IQ
alien-IQ's picture

wait a minute...are you saying that it WAS"NT Waddell & Reed that caused the flash crash?

But..but..but..the SEC said...

Fri, 07/08/2011 - 12:45 | 1437183 Tense INDIAN
Tense INDIAN's picture

this is ONLY GOOD gold mining stock in Indian market ....sadly it ended the BULL when the bull in Gold started.....has been declining for a long time ...most probably it will also lead the next GOLD BULL by a couple of months.....:::

 

http://markettechnicals-jonak.blogspot.com/

 

 

Fri, 07/08/2011 - 12:49 | 1437194 I_ate_the_crow
I_ate_the_crow's picture

Great opening paragraph. Parasites indeed.

Fri, 07/08/2011 - 12:53 | 1437217 espirit
espirit's picture

"Algo's Gone Wrong".  If this was a new un-reality show during primetime TV, I'd watch it.

Fri, 07/08/2011 - 13:19 | 1437317 rufusbird
rufusbird's picture

Great topic, good post, good comments!

Fri, 07/08/2011 - 13:25 | 1437348 Mercury
Mercury's picture

Amen.

I've certainly put in my two cents on this issue in posts past.

It would be nice if this issue finally gained some traction.

Fri, 07/08/2011 - 13:35 | 1437386 Urban Redneck
Urban Redneck's picture

This could be fixed in one day with a one-page bill and a banker tax that is actually SUPPORTED by significant number of jet owning top .001% BANKERS. That the TBTF management oppose it, and that the transaction tax will never become law- even with an ass clown-in-chief desparate to save his job and blame someone else for the bad economy, and 535 congress-clowns desparate for tax revenue aka debt-free pork, should serve as a warning as to just how influential the TBTF subset of the industry has become.

Fri, 07/08/2011 - 14:10 | 1437498 bonddude
bonddude's picture

When the aliens (my mom) get here I vote Tyler be our representative. we need galactic 

truth tellers. mmmK?

Fri, 07/08/2011 - 14:15 | 1437515 Catullus
Catullus's picture

This is central bankers realizing they've lost control of the markets. That's all central banking was ever about. HFT is a threat to the system itself. It can literally imagineer M3. The central banking cartel has to be aware of this.

Fri, 07/08/2011 - 14:30 | 1437584 binky
binky's picture

The move from fractions to decimals has been a huge success.

Fri, 07/08/2011 - 14:48 | 1437673 Waterfallsparkles
Waterfallsparkles's picture

Hft holds the Market up. Plus, the Weekly options.

I do not think that they will ever get rid of it.  Even though no one trades the Market goes higher and higher.  It appears that HFT can only Buy Stocks.

Funny how every one was against Naked Short selling and now we have a system called HFT that can only Buy Stocks.  No matter how high they go and defy all logic.

I suppose the real problem is that when there are too many sellers HFT shuts down and stocks plunge beyond reason.  Have to remember that the order book is only 3 prices deep.

Fri, 07/08/2011 - 14:50 | 1437685 Waterfallsparkles
Waterfallsparkles's picture

Do not need any QE3 just HFT.  That is the slogan.

Fri, 07/08/2011 - 14:55 | 1437711 GoinFawr
GoinFawr's picture

So May 6 2010 wasn't simply a 'shot across the bow' designed to water down the Financial Reform Bill?

Fri, 07/08/2011 - 15:00 | 1437730 Hacksaw
Hacksaw's picture

Transaction tax now !

Fri, 07/08/2011 - 15:44 | 1437994 Use of Weapons
Use of Weapons's picture

I find it interesting that Tyler imagines he's not being read in the square mile... Admittedly, a lot of people think that this is the hang-out of the batshit insane or Zynisch-zum-Tode, and there's the 'get your jollies here' crew.

 

But, bottom line: ZH is read, and often says the 'unspoken'. Just 'cause policy dictates that a policy is enacted doesn't mean the people doing it don't have 'off the record' views.

Fri, 07/08/2011 - 21:09 | 1438850 AldousHuxley
AldousHuxley's picture

UK is toast. take your depressing island and shove it up your queen's

Fri, 07/08/2011 - 22:07 | 1438970 dcb
dcb's picture

while the establishment is always behind the curve, haldane is one of the best out there. How many people in authority are actually speaking out against hft. any in our federal reserve (LOL). his papaer the doom loop, while evident to ZH readers is a classic and should be read by all. I keep it on my computer and send it out to friends.

 

the other important fact, is that the establishment only listens to people in the club. to get into the club you usually have to have a set world view. that way they always reinforce their ideology. Haldane is one of the few who actually investigates the faults of this world view. Without people like haldane the elites wouldn't even be discussing the topic.

Fri, 07/08/2011 - 22:49 | 1439030 cityguyusa
cityguyusa's picture

A shift back to yearly or even 5 year guidance would be nice too.  That would eliminate a lot of speculating and price runups.  Imagine a market that truly worked on fundamentals of a corporations business.

Sat, 07/09/2011 - 02:51 | 1439247 AustrianEconomist
AustrianEconomist's picture


It is clear that the Economic
theories in place are outdated, just look at the unemployment report, 99.99% of
professional economist were completely wrong and are all wearing their rose coloured
glasses rather be realistic. The US economy is in huge trouble, that’s a fact.


Check out the latest from the Capital Research Institute (CRI): Creative Destruction – A New Economic Order
www.capitalresearchinstitute.org

Thu, 07/14/2011 - 12:40 | 1456501 Stares straight...
Stares straight ahead's picture

Tyler,

Can you create a calender of these events? 

 

Do NOT follow this link or you will be banned from the site!